How Do Housing Prices Affect Residents' Health? New Evidence From China

Abstract

This paper aims to explore the effect and mechanism of rising housing prices on residents' physical and mental health. Using data from the China Family Panel Studies from 2014 to 2018, we investigate the impact and mechanism of rising housing prices on the mental and physical health of urban residents through multiple grouping regression and analysis of variance. The study finds that overall, rising housing prices have a positive effect on residents' mental health but a negative effect on physical health, and those who do not own a house show the greatest adverse effect. The impact of rising housing prices on health is mainly reflected in three aspects: the wealth effect, cost effect, and comprehensive environmental expectation effect. Of these, the wealth effect and comprehensive environmental expectation effect play a role in promoting residents' health, whereas the cost effect has a strong inhibitory effect. This paper also analyzes how house prices impact health and finds that having health insurance reduces residents' active health behavior, thus affecting their physical and mental health levels, which has a positive effect on uninsured residents.